Fresh banking licence guidelines have been issued which means that the sector will see plenty of activity in the coming months. Job switching will be at an all-time high and as more licences are announced, the demand for skilled people will be on the rise, says Nilay Khandelwal
The apex bank has picked the perfect time for the roll out of its fresh set of banking licences. The back and forth between the Election Commission and the RBI has finally resulted in a positive outcome with Infrastructure Development Finance Co (IDFC) and microfinance lender, Bandhan Financial Services ltd emerging victorious with in-principle licences for a preliminary 18-month period. This will mark the dawn of a bullish Indian market. An unprecedented leap of activity is expected on the HR front as firms enter a war for talent and both existing and new players jostle with one another to attain a firm footing in the market.
The entire application process has been quite an interesting play of events. Those who did not make the cut continue to have a positive outlook as the RBI’s move suggests that more licences are likely to be granted in the near future. After finally making it through the entire screening process in one piece, IDFC and Bandhan Financial Services will now have to start gearing up in order to build a fully-functioning banking institution within the 18-month period. Most HR managers will follow a two-pronged approach: Strengthening their senior leadership and gunning for branch expansion.
Senior leadership will depend on the blueprint submitted to the RBI in terms of the timeline. The hiring process for this level of the pyramid will now begin. The next stage would be to step up the number of branches across the country. This is the phase that will see maximum internal transition and job rotation within the organisation, especially in tier II and III cities. Organisations would need to recognise the potential of the existing talent pool and evade over-hiring.
Job switching will be at an all-time peak in the April-July considering that most bonuses are paid out during this time. Chances are that the two institutions will have to overcome the challenge of more offers being doled out, rather than incoming acceptance letters. This will, of course, signify that the competition is vying for the same talent pool and their offers are far more satisfactory.
An important tip for HR managers to bear in mind will be to ensure that a candidate’s interview experience is well managed. At the same time, it will be interesting to note the kind of strategies that the competition will employ to retain their best talent.
Given the situation, at a senior level, most firms will indulge in replacement hiring practices as opposed to succession planning, which is unique to mature organisations. As more licences are announced, the market will witness a huge demand creation with the possibility that the supply may not be sufficient to meet the demand. The most coveted roles in the upcoming months would be CxO (executive) positions across corporate functions like risk, products, legal, technology, along with corporate bankers. At this stage, it will be advisable to identify the best alternatives for the top talent as a safety net.
A talent retention will be the best way forward for organisations that want to maintain a sense of employee goodwill in the face of adversity. Bonus payout season was a great time for organisations to showcase their good faith in their top performers. Some of them have already been rewarded. In addition to monetary reward, employees at management levels should be able to envision a growth trajectory for themselves and not feel as though their careers have plateaued in a particular organisation.
The coming months will see a high incidence of talent poaching and the only way to maintain a level of sanity will be to utilise a third party recruitment firm. This is the best time for both IDFC and Bandhan to engage with previously defined target candidates and kick-start the recruitment process. Keeping in mind the hope that the licences may be extended to a few more players, the other applicants might still be keen to identify the top talent in the market. It is definitely safe to say that the planning has begun and it is just a matter of time before D-day.
As far as the infrastructure available for branch expansion is concerned, most banks will have a ready corporate banking team straight out. As most corporate teams operate out of the major metros, this will be a favourable place to start. On the other hand, retail bank branches in Tier II and Tier III cities would entail acquiring land or lease. This will also depend on the number of branches they are authorised to function within the country. Needless to say, despite the RBI’s emphasis on financial inclusion, the roll out of these branches will take a considerable amount of time. Eventually, the entire sector will see a trickle-down effect.
The roll out of these new licences is undoubtedly an interesting time. The recruitment space will certainly undergo a much needed transformation. From a recruitment perspective, the execution stage will be closely monitored and commented upon. The banking sector has been in hibernation mode for a while now and the upcoming developments will undeniably pique the interest of HR experts who would like to see the Indian banking scene turn vibrant once again.
(The writer is director,Michael Page India)